Delhi District Court
Laxmi Remote (India) Private Limited vs Lmo Digital Cable Net Solutions Private ... on 22 May, 2023
~1~
In the court of Sh. Umed Singh Grewal, District Judge-
Commercial Court-05, Central District
Tis Hazari, Delhi.
CS (Comm) No.: 1013/2021
In the matter of:
Laxmi Remote (INDIA) Private Limited
Through its MD/Director/CEO/ Authorised Signatory
Having its office at :
19-20/1591, 3rd Floor, M.J. Building,
Bhagirath Place, Delhi, 110006, .... Plaintiff
Vs.
LMO Digital Cable Net Solutions Private Limited
Through its Chairman/MD/Directors/Authorised Signatory
Having its office at :
Azim Complex, Zone 1, Hanuman Ward,
Taluka-Warora, District Chandrapur,
Maharashtra - 442907 ..... Defendant
Date of Institution : 20.03.2021
Date on which arguments was concluded : 15.05.2023
Date of pronouncement of order : 22.05.2023
(Suit for recovery of ₹ 23,39,763/- )
***************************
Present: Sh. Manish Batra, Ld. Counsel for plaintiff.
Sh. Varun Malhotra, Ld. Counsel for defendant.
CS (COMM) No.: 1013/21 Page No. 1/16
Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private
Limited And Ors.
~2~
JUDGMENT:-
1. This is an ordinary suit for recovery of principal sum of Rs. 23,39,763/-, interest of Rs. 7,56,556 @ 18 % per annum from 07.06.2018 to 28.02.2021, for pendentlite and future interest and cost.
2. The plaintiff is pioneer in manufacturing of remote control headsets, set top boxes and ancillary cable TV related electronic components. The defendant company provides services like broadband, IP TV and digital CATV signal etc.. Also, it is in the business of distribution and marketing of set top boxes and ancillary items in its wide customer base. It contacted plaintiff through its representative in 2015, inspected the goods as per requirement and technical specification consequent to which there was price negotiation. After satisfying itself with every detail, the defendant used to place oral/written purchase orders for supply of remote control, set top boxes and other ancillary items. The plaintiff supplied those goods against invoices and transport receipt as per the requirement and satisfaction of the defendant for which the defendant never raised any complaint. The plaintiff used to maintain ledger account of the defendant in the ordinary course of business in which the sale and payment detail used to be entered. As per that account, CS (COMM) No.: 1013/21 Page No. 2/16 Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~3~ following sale was made to the defendant and following payment was made to the plaintiff :-
L.M.O. Digital Cable Net Solution Pvt. Ltd. Azim Complex, Zone 1 Hanuman Ward Period - Taluka- Warora, Distt. Chandrapur 01.04.2015 to 31.03.2019 Sale Voucher Voucher Bill No. Bill Date Particulars Dr. Amt.
Date Type
19.12.2015 Sale 152003585 19.12.2015 Cr. to Sales A/c 1319166
19.12.2015 Sale 152003586 19.12.2015 Cr. to Sales A/c 219861
24.12.2015 Sale 152003654 24.12.2015 Cr. to Sales A/c 1099305
30.12.2015 Sale 152003756 30.12.2015 Cr. to Sales A/c 2198610
15.02.2016 Sale 152004572 15.02.2016 Cr. to Sales A/c 619076
15.02.2016 Sale 152004573 15.02.2016 Cr. to Sales A/c 309538
10.05.2016 Sale 160000513 10.05.2016 Cr. to Sales A/c 712497
25.05.2016 Sale 160000700 25.05.2016 Cr. to Sales A/c 28500
08.06.2016 Sale 160000897 08.06.2016 Cr. to Sales A/c 85500
09.08.2016 Sale 160000850 09.08.2016 Cr. to Sales A/c 569998
31.12.2016 Sale 160001861 31.12.2016 Cr. to Sales A/c 213750
10.03.2017 Sale 160002561 10.03.2017 Cr. to Sales A/c 213750
24.03.2017 Sale 160002781 24.03.2017 Cr. to Sales A/c 1419690
03.04.2017 Sale 170000008 03.04.2017 Cr. to Sales A/c 709845
09.05.2017 Sale 170000493 09.05.2017 Cr. to Sales A/c 354922
31.05.2017 Sale 170000794 31.05.2017 Cr. to Sales A/c 11804
31.05.2017 Sale 170000795 31.05.2017 Cr. to Sales A/c 3898
29.06.2017 Sale 170001182 29.06.2017 Cr. to Sales A/c 2807
05.09.2017 Sale 175000198 05.09.2017 Cr. to Sales A/c 8505
05.09.2017 Sale 175000199 05.09.2017 Cr. to Sales A/c 27
07.10.2017 Sale 175000316 07.10.2017 Cr. to Sales A/c 25
CS (COMM) No.: 1013/21 Page No. 3/16
Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~4~ 07.10.2017 Sale 175000317 07.10.2017 Cr. to Sales A/c 10777 07.10.2017 Sale 175000322 07.10.2017 Cr. to Sales A/c 3245 15.01.2018 Sale 175003222 15.01.2018 Cr. to Sales A/c 8338 15.01.2018 Sale 175003223 15.01.2018 Cr. to Sales A/c 5251 06.07.2018 Sale 185004516 06.07.2018 Cr. to Sales A/c 3906 06.07.2018 Sale 185004517 06.07.2018 Cr. to Sales A/c 2065 Total 10133656 L.M.O. Digital Cable Net Solution Pvt. Ltd. Azim Complex, Zone 1 Hanuman Ward Period - Taluka- Warora, Distt. Chandrapur 01.04.2015 to 31.03.2019 Payment Receipt Voucher Voucher Bill No. Bill Date Particulars Dr. Amt.
Date Type 16.12.2015 Receipt 152001584 16.12.2015 Debit to 1320000 HDFC Bank Ltd.
17.12.2015 Receipt 152001584 17.12.2015 Debit to 390000 HDFC Bank Ltd.
18.12.2015 Receipt 152001592 18.12.2015 Debit to 142500 HDFC Bank Ltd.
18.12.2015 Receipt 152001612 18.12.2015 Debit to 142000 HDFC Bank Ltd.
23.12.2015 Receipt 152001614 23.12.2015 Debit to 645000 HDFC Bank Ltd.
24.12.2015 Receipt 152001637 24.12.2015 Debit to 2200000 HDFC Bank Ltd.
12.02.2016 Receipt 152002060 12.02.2016 Debit to 797500 CS (COMM) No.: 1013/21 Page No. 4/16 Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~5~ HDFC Bank Ltd.
12.02.2016 Receipt 152002064 12.02.2016 Debit to 103500 HDFC Bank Ltd.
15.02.2016 Receipt 152002075 15.02.2016 Debit to 27500 HDFC Bank Ltd.
09.05.2016 Receipt 162000255 09.05.2016 Debit to 712500 HDFC Bank Ltd.
12.05.2016 Receipt 162000277 12.05.2016 Debit to 28500 HDFC Bank Ltd.
03.06.2016 Receipt 162000629 03.06.2016 Debit to 85500 HDFC Bank Ltd.
30.07.2016 Receipt 162000931 30.07.2016 Debit to 342000 HDFC Bank Ltd.
30.07.2016 Receipt 162000857 30.07.2016 Debit to 228000 HDFC Bank Ltd.
Total 8550449 The outstanding principal amount was Rs. 15,83,207 and hence the defendant was approached several times to settle the dues but it did not budge and ultimately a legal notice dated 27.02.2020 was issued which was served on 13.03.2020. Thereafter, the defendant contacted plaintiff repeatedly acknowledging the liability but not a single penny was paid and so, it is entitled to interest also @ 18 % per annum from CS (COMM) No.: 1013/21 Page No. 5/16 Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~6~ 06.07.2018 to 28.02.2021 i.e. up to the date of filing of the case totaling to Rs. 7,56,556/-.
3. The defendant came out with the case that the plaintiff supplied substandard quality items and hence it was requested several times to provide technical support to run the set top boxes but the plaintiff did not pay heed due to which a wide range of its customers shifted their loyalty to other service providers causing financial loss to it. Several cable operators held back its payments as the defendant was not able to provide them regular service due to faulty set top boxes. Despite all these odds, the whole payment was made to the plaintiff and hence it is not entitled to a single penny from it.
A person namely Kishor Narkede used to visit its office on behalf of the plaintiff and the defendant made him payment of entire amount in cash. A lady namely Mrs. Kaur informed defendant in May, 2018 on behalf of the plaintiff that said person had been removed due to financial fault and henceforth, she would deal with the defendant. Also, the payment reflected in the statement of account filed by plaintiff does not match with the statement of account of the defendant as some entries have not been reflected in that statement. Moreover, no goods were supplied to it through invoice no. 152003654 dated 24.12.2015 and 160001861 dated 31.12.2016 and hence there was no question of raising those invoices by the plaintiff. Last objection CS (COMM) No.: 1013/21 Page No. 6/16 Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~7~ is that mandatory provisions of Section 12 A of Commercial Court Act, 2015 have not been complied with as there was no pre-institution mediation and hence suit is not maintainable.
4. Following issues were framed on 25.07.2022 :-
i. Whether the suit is not maintainable due to non compliance of Section 12A of Commercial Court Act? (OPD) ii. Whether the plaintiff is entitled for recovery of suit amount, as prayed for ? (OPP) iii. Whether the plaintiff is entitled for any interest, if so at what rate and for which period ? (OPP) iv. Relief.
5. In order to substantiate the case, the plaintiff examined its Assistant Manager Mr. Vikas Jain as PW1 who repeated the contents of plaint in his affidavit in evidence Ex. PW1/A and relied upon following documents :-
1. Ex. PW1/1 is copy of Certificate of Incorporation.
2. Ex. PW1/2 is Internet generated Company Master Data of the Defendant no. 1.
3. Ex. PW1/3 is electronically generated statement of account.
4. Ex. PW1/4 (colly) are purchase orders (received through email).CS (COMM) No.: 1013/21 Page No. 7/16
Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~8~
5. Ex. PW1/5 (colly) are sale invoices.
6. Ex. PW1/6 (colly) are transport receipts.
7. Ex. PW1/7 is copy of legal notice dated 27.02.2020.
8. Ex. PW1/8 (colly) are postal receipts.
9. Ex. PW1/8A is Email dated 02.03.2020.
10. Ex. PW1/9 is copy of board resolution.
11. Ex. PW1/10 is certificate under Section 65-B of Indian Evidence Act.
6. The defendant examined its Director Mr. Dharamprakash Trilokinath Dubey as DW1 who repeated the contents of written statement. He relied upon following documents :-
1. Ex. DW1/1 are E-mail communication.
2. Ex. DW1/2 is statement of books of accounts.
He further deposed that the defendant had complained several times to the plaintiff regarding substandard quality goods by sending E-mail Ex. DW1/1. He relied upon a document Ex. DW1/2 terming the same as statement of account, to say that some payment reflected in that ledger account is not finding place in the ledger account of the plaintiff. Next deposition is that the defendant has paid a total sum of Rs. 1,00,50,091/- for all transactions but the same has been shown as only Rs. 85,50,449/- till 30.07.2016 by the plaintiff.
CS (COMM) No.: 1013/21 Page No. 8/16Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~9~ Issue No. 1
7. Learned counsel for defendant argued that as per the provisions of Section 12 A of Commercial Court Act, 2015, it is mandatory of the plaintiff to approach the mediation cell before filing a recovery suit. In the case in hand, the plaintiff did not move pre-institution mediation application and hence the suit is not maintainable.
On the other hand, argument of learned counsel for plaintiff is that the provisions of that section became mandatory w.e.f. 22.08.2022 whereas the case was filed on 22.03.2021 and hence, it is very much maintainable.
8. In, "M/s Patel Automation Private Limited and Ors. Vs. Rakheja Engineers Private Limited", SLP (C) No. 5737 of 2022, decided on 17.08.2022, the hon'ble apex court held that mandatory provisions of Section 12 of Commercial Court Act i.e. approaching the mediation cell before filing the suit, were applicable only w.e.f. 22.08.2022. The suit was filed on 22.03.2021 and hence the same is very much maintainable. This issue is decided in favour of plaintiff and against defendant.
Issue No. 29. Learned counsel for defendant argued that two invoice nos. 152003654 dated 24.125.2015 and 160001861 dated CS (COMM) No.: 1013/21 Page No. 9/16 Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~ 10 ~ 31.12.2016 have not been placed on record. Moreover, the goods against those invoices were not supplied. Due to non filing of the invoices, the amount mentioned therein cannot be taken into account because there is no material on the file to substantiate the ledger account of the plaintiff.
Next argument is that his client had made payment of Rs. 14,99,642/- to the plaintiff as per statement of account Ex. DW1/2 but that amount has not been reflected in the ledger account produced by the plaintiff.
Last argument is that the plaintiff had supplied substandard quality of STBs to the defendant against which he had complained several times by sending E-mails and had also asked to provide some solution to STBs but no step was taken by plaintiff due to which the wide customer base of the defendant shifted to other service providers. Due to faulty goods, his customers did not make it payment of STBs and the defendant suffered a huge loss. Despite being such a state of affairs, each and every penny was paid to the plaintiff and it is not entitled to anything from it.
10. The counsel for plaintiff admitted that invoice no. 152003654 has not been filed but it has no adverse effect on his case because he is not asking anything from the defendant for that invoice. He further submitted that as per invoice, the defendant was to make payment either through DD or cheque.
CS (COMM) No.: 1013/21 Page No. 10/16Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~ 11 ~ Whatever amount was paid, has been reflected in its statement of account. No cash was ever paid to the plaintiff and hence there was no occasion for reflecting the amount of Rs. 5,000/- and Rs. 1,40,250/- mentioned in Ex. DW1/2, in its statement of account Ex. PW1/3.
He next argued that no good was of substandard quality. The defendant never complained to the plaintiff regarding the quality of the goods and hence the defence taken by the defendant is afterthought. The defendant did not place on record any document to show that the whole payment was made by it to a representative namely Mr. Kishor Narkhade of the plaintiff. His contention is that the said person had no connection with the plaintiff at any point of time.
11. It is correct that the plaintiff has not placed on record invoice no. 152003654. Perusal of statement of account Ex. PW1/3 of the plaintiff shows that balance towards the defendant as on 08.08.2016 was zero. So, the plaintiff is not seeking any relief for any invoice prior to 09.08.2016. Due to that reason, non-filing of the invoice no. 152003654 dated 24.12.2015 is not causing any dent to the plaintiff's case.
But invoice no. 160001861 dated 31.12.2016 has been placed on record and same is of Rs. 2,13,750/-. The said invoice is duly reflected in statement of account Ex. PW1/3. So, there is CS (COMM) No.: 1013/21 Page No. 11/16 Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~ 12 ~ no substance in the argument of counsel for defendant that two invoices were not filed.
12. The defendant is heavily relying upon a document Ex. DW1/2 to prove that the amounts mentioned therein have not been reflected by the plaintiff in its statement of account Ex. PW1/3. But perusal of Ex. DW1/2 shows that same is not statement of account. It does not seem to have been maintained in the ordinary course of business. The title of the document is not statement of account and rather, the title is "Payment in the LMO books but not recorded by Laxmi Remote". The statement of account is that document which reflects debit as well as credit entries. But Ex. DW1/2 is reflecting only the payment made by the defendant to the plaintiff.
It contains 11 entries. Juxtaposition of Ex. PW1/3 and Ex. DW1/3 shows that entries appearing from serial no. 3 to 11 in Ex. DW1/2 find place in Ex. PW1/3 also. It is pertinent to mention that the amount reflected in those entries was made to the plaintiff by way of DD/Cheque etc.. But the entry no. 1 and 2, of Rs. 5,000/- and Rs. 1,40,250/- are not finding place in Ex. PW1/3. It is the case of the defendant that the said amount was given to the representative namely Mr. Kishor Narkade of the plaintiff. But the contention of the plaintiff is that the said person is not related with it. To prove any association of Mr. Kishor Narkade with plaintiff, the defendant did not file any document.
CS (COMM) No.: 1013/21 Page No. 12/16Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~ 13 ~ It did not examine Mr. Kishor Narkade in evidence. So, the defendant has failed to prove that amounts of Rs. 5,000/- and Rs. 1,40,250/- were paid to the plaintiff.
13. The defendant is relying upon several E-mails from 14.03.2016 to 09.10.2018 Ex. DW1/1 (colly) to prove that the plaintiff had supplied inferior quality goods.
As discussed earlier, the plaintiff's case is for vouchers starting from 09.08.2016 onwards. Till 08.08.2016, the balance against defendant was zero. It means that till 08.08.2016, the account between the parties was well settled. The first six E- mails are from 14.03.2016 to 02.08.2016. Perusal of those mails suggest that some material was defective. But those mails cannot be read into evidence because the defendant did not file certificate under Section 65-B of Indian Evidence Act. Moreover, the defendant had already made payment of all invoices up to 08.08.2016. Even if the first six mails are taken into account, those are not going against the plaintiff because the defendant had already made payment of every item regarding which the mails were sent.
The seventh mail is dated 27.03.2017, in which it is mentioned that there was blackout in 50 STBs. The plaintiff was asked to provide 100 STBs for replacement. It is pertinent to mention that as per invoice, cost of one STB was Rs. 1,343/-. The invoices further show that the plaintiff had supplied more than CS (COMM) No.: 1013/21 Page No. 13/16 Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~ 14 ~ 1500 STBs out of which, the complaint was only for 50 STBs. So, only the negligible number of STBs were defective. Moreover, it is neither mentioned in written statement nor in the affidavit in evidence of DW1 whether the plaintiff replaced 50 STBs or not in response to mail dated 27.03.2017.
Last mail is dated 09.10.2018 in which it is mentioned that STBs were showing all channels without any SMS and CAS activation command. The plaintiff was requested to check and do the needful. The contents of the mail do not show that the STBs were incorrigible. It merely shows that some STBs showed video without activation command. Such software defect could have been easily removed. Moreover, the last delivery of goods, as per statement of account Ex. PW1/3 and invoices, was made on 23.03.2018. The mail is dated 09.10.2018. There is a gap of about seven months in the delivery and complaint.
So, it cannot be said that inferior quality goods were supplied to the defendant.
14. As per statement of account Ex. PW1/3, some items of Rs. 3,906 and Rs. 2,065/- were delivered to the defendant on 06.07.2018. But it is not supported by any invoice. It is pertinent to mention that as per Section 34 of Indian Evidence Act, the statement of account, unless corroborated by other document, shall not alone be sufficient evidence to charge any person with CS (COMM) No.: 1013/21 Page No. 14/16 Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~ 15 ~ liability. Hence the amount of Rs. 3,906/- and Rs. 2,065/- cannot be taken into account.
15. As per the contention of the plaintiff, the outstanding principal amount is Rs. 15,83,207/- as reflected in Ex. PW1/3 but the amount of Rs. 3,906 and Rs. 2,065/- cannot be taken into account as the same is not supported by invoices. So, after deduction, the net comes to Rs. 15,83,207 - (Rs. 3,906/- + Rs. 2,065) = Rs. 15,77,236/-.
In view of the above discussion, this issue is decided in favour of plaintiff and against defendant.
Issue No. 316. It is mentioned in the terms and conditions described in invoices that payment was to be made through DD or cheques and if the bill was not paid within due date, interest @ 18 % per annum shall be charged on overdue amount. But interest @ 18 % per annum is not only excessive but penal also. Taking into account the fact that transactions were commercial in nature, interest @ 12 % per annum shall do the justice.
As reflected in statement of account, last payment was made by defendant on 23.03.2018. So, the plaintiff shall be entitled to interest @ 12 % on the principal amount w.e.f. 23.03.2018.
CS (COMM) No.: 1013/21 Page No. 15/16Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.
~ 16 ~ Issue No. 4
17. In view of decision on issue nos. 1, 2 and 3, it is held that plaintiff is entitled to a sum of Rs. 15,77,236/- from defendant along with interest @ 12 % w.e.f. 23.03.2018 till realisation along with cost. Decree sheet be prepared.
File be consigned to record room after due compliance.
Digitally
Announced in open court signed by
UMED
on 22th day of May, 2023
UMED SINGH
SINGH Date:
2023.05.22
(UMED SINGH GREWAL) 15:41:45
District Judge-Commercial Court-5 +0530
Central District, Delhi.
CS (COMM) No.: 1013/21 Page No. 16/16
Laxmi Remote (INDIA ) Pvt Ltd Vs. Lmo Digital Cable Net Solutions Private Limited And Ors.